Shopify and TikTok Ink New Social Commerce Deal

The collaboration between Shopify and TikTok will open up social commerce opportunities for Shopify merchants on TikTok.

Social commerce is, for the moment, the favorite child of ecommerce and social media. A marriage between marketing return on investment (ROI) targets and social media monetization, this retail trend has now shaped a fresh partnership between two global Internet companies.

In a statement released on October 27, ecommerce company Shopify announced that it is pairing up with ByteDance’s social media network TikTok. The deal brings together two major players within the social commerce space.

This partnership between Shopify and TikTok makes the TikTok platform accessible to more than one million Shopify merchants, the statement noted. Shopify shares rose 4.2% after the announcement was made.

What the deal means for Shopify merchants

Merchants will be able to create a TikTok For Business account and source In-Feed “shoppable” video ads from Shopify, the statement said. The ads will direct customers to the merchant’s Shopify storefront for checkout.

Further, merchants will also be able to use ready-made templates with existing images or videos. Video ads will be generated automatically, based on the products that merchants would like to feature.

“The TikTok channel means Shopify merchants – even those without a strong TikTok following of their own yet – can connect with these new audiences using content that feels authentic and genuine to the TikTok experience,” Shopify Vice President of Product Satish Kanwar said in the statement.

“We’re thrilled to be the first partner to welcome TikTok to the world of commerce, particularly right now, as our merchants prepare for a busy online holiday shopping season,” he added.

The partnership between Shopify and TikTok will also involve the testing of new ecommerce features over the next few months, focused on enabling merchants to grow their paid and organic reach.

While the TikTok channel has already been opened to merchants in the U.S., it will be made available to select markets in North America, Europe, and Southeast Asia by early 2021, the statement noted.

“As social commerce proliferates, retailers are recognizing that TikTok’s creative and highly engaged community sets it apart from other platforms,” TikTok Vice President of Global Business Solutions Blake Chandlee said in the statement.

“We’re constantly exploring new and innovative ways to connect brands with our users, and Shopify is the perfect partner to help us grow and expand our commerce capabilities globally,” Chandlee added.

Shopify also announces new initiatives for Black-owned businesses

Shopify and TikTok have also shaken hands over a co-branded Hashtag Challenge Plus (HTC+) called #ShopBlack, the statement said.

TikTok’s HTC+ adds a shoppable component to hashtags. Users can create or view videos under the sponsored hashtag, and view featured products for in-app purchasing under a separate tab.

#ShopBlack will run from 10 November to 15 November, highlighting products from over 40 Black-owned businesses on Shopify, the statement said.

The campaign by Shopify and TikTok will also feature music, a custom branded effect, and creator content, and TikTok users will be able to highlight Black-owned business using the hashtag.

This is TikTok’s first co-branded HTC+, the statement added. The feature was launched late last year.

In addition to #ShopBlack, Shopify announced the launch of the Black Business Directory in further support of Black merchants on Shopify. The directory will help users discover and shop from Black-owned businesses on Shopify, the statement said.

Riding the social commerce wave

By enabling ecommerce on social media platforms, social commerce gives businesses a much-needed route to monetizing their social media presence and measuring ROI on social media spending. In return, it also helps social media platforms capitalize on their large user base, and bump up their core B2B revenues.

The social commerce market is expected to cross $600 billion in the next seven years. China dominates this trend, and is predicted to account for a sixth of the total social commerce market size.

The social commerce wave comes as no surprise. Eight out of every 10 consumers will choose a brand they follow on social media over a competitor. Further, 71% of users are more likely to make a purchase based on referrals on social media.

On a parallel track, livestreaming has emerged as an exciting trend within the social commerce landscape. Popular in China and catching up in other parts of the world, livestreaming allows users to watch live video feeds of influencers demonstrating a product and answering questions related to it.

Brands are catching on to the sales potential of livestreaming and social commerce. Chinese social media influencer ‘Lipstick King’ Li Jiaqi, for instance, once sold 15,000 lipsticks in five minutes on Chinese ecommerce website Taobao.

For TikTok, which is already a video-focused social media site, this is promising news. Should the social commerce trend go global as rapidly as expected, it may throw the troubled platform a much-needed lifeline for revenues, after losing one of its biggest markets India earlier this year.

Header image courtesy of Shopify

SHARE THIS STORY